Tenants struggle as shortage of rental housing continues

Private sector tenants are continuing to struggle as new data highlights an ongoing shortage of homes to rent.

Almost eight in ten landlords (77 per cent) across England and Wales reported strong demand from prospective tenants in the final quarter of 2024 according to research from Pegasus Insights.

The data, compiled for the National Residential Landlords Association (NRLA), suggests demand is highest in South West England. 81 per cent of respondents in the region reporting strong demand. This was followed by 80 per cent who said the same in the South East and the North West. 

Despite strong tenant demand, across England and Wales, 20 per cent of landlords said they had sold property over the previous 12 months. This was almost three times more than the seven per cent who said they had purchased new properties to rent. 
 
Looking ahead to the next 12 months, 41 per cent of providers of rental housing say they plan to cut the number of properties they rent out, compared to just five per cent saying they will increase the number. 

The figures follow government data which show that selling property is the single biggest reason for bringing a tenancy to an end, and almost three times bigger than the next most common reason.

With demand far outstripping supply, the impact will be felt most acutely by those in receipt of housing benefits, as the support they receive to cover their rents is set to be frozen from April this year. 

The NRLA is calling for pragmatic steps to boost the confidence of responsible landlords to stay in the market and sustain tenancies. As a result, the Government must:

•    Scrap the disastrous stamp duty hike on the provision of new homes to rent in the Budget last year. Paul Johnson, head of the Institute for Fiscal Studies has warned the hike will: “reduce the supply of rental housing and so increase rents.”

•    Propose a clear plan to ensure the courts more speedily process legitimate possession claims when Section 21 repossessions are ended by the Renters’ Rights Bill. This needs to include further investment in the justice system as called for by The Law Society. 

•    Reverse the decision to freeze housing benefit rates to support those on low incomes into rented housing. 

Ben Beadle, Chief Executive of the NRLA, said:

“Plans to improve security for tenants will mean nothing if the rental accommodation they need is not there in the first place. 

“Tenants right across the country are feeling the effects of a lack of housing across the board, including with respect to the privately rented properties. Without change, the situation is only going to worsen. We need policies that genuinely support those who provide decent quality homes to rent.  

“Tax hikes which penalise those wanting to provide such homes need to be scrapped. What’s more, those providing homes to rent must have the confidence to stay in the market when the Renters’ Rights Bill is passed. At present that confidence simply is not there.” 

-ENDS-
 
Notes:

•    Pegasus Insights undertook 789 online interviews with current members of the National Residential Landlords Association between 8th December 2024 and 3rd January 2025.

•    In April-June 2024, the end of a private rented Assured Shorthold Tenancy was the most common reason for households being owed a homelessness prevention duty, accounting for 15,350 households. The most common recorded reasons households were owed a prevention duty due to the end of an AST were related to landlords wishing to sell (7,130) or relet the property (2,810). See here. 

•    Richard Atkinson, President of the Law Society, has said of the Renters’ Rights Bill: “The bill may also lead to more contested hearings, as landlords will now have to show good reason for eviction. Renters will have a greater ability to challenge evictions, which may lead to additional cases entering the court system. The government must outline how it intends to equip courts with adequate resources to handle this rising demand, while dealing with existing backlogs.

“While we applaud the government for its great strides to bolster tenant rights, the bill will not be effective without further investment in the justice system. We urge the government to provide greater funding and more clarity to the enforcement provisions so that justice is accessible to renters and landlords alike.” See here.  

•    Commenting on the decision in the budget to increase from 3% to 5% the stamp duty levy paid on the purchase of homes to rent out, Paul Johnson, Director of the Institute for Fiscal Studies noted that: “That the chancellor decided to increase stamp duty, if only on second properties, is most disappointing of all. It again reduces transactions, increases again the bias in favour of owner occupation, and against renting, and at least part of the consequence will be to reduce the supply of rental housing and so increase rents.” See here.  

•    Further information about the NRLA can be found at www.nrla.org.uk.  It posts on X @NRLAssociation. 

•    The NRLA’s press office can be contacted by emailing [email protected] or by calling 0300 131 6363.